Four folks have been convicted in a program to defraud the Medicare and Medicaid program through what has become widely known as a “motorized wheelchair fraud” scheme.
Carmelita Thurman, 35, who jointly ran three durable medical equipment (DME) companies in the Houston area pleaded guilty today to conspiracy to commit health care fraud and health care fraud in a hearing before U.S. District Judge Nancy F. Atlas. Thurman is the last of four charged by indictment for their involvement in a scheme to defraud Medicare and Medicaid. Michelle Ann Ray, 40, pleaded guilty last week. Terri Ann Orozco, 44, pleaded guilty early this month and Sharon Thomas, 41, pleaded guilty in October 2007.
Thurman, Orozco and Ray, jointly ran three DME companies in Houston: Twice as Nice Medical Supply, Top of the Line Medical Supply and Heart to Heart Medical Supply. From 2002 through 2004, the three companies billed Medicare and Medicaid primarily for motorized wheelchairs and related accessories for approximately $7 million and received $3.8 million in payments on the claims, but actually delivered less expensive scooters to the beneficiaries. The beneficiaries, who could sit, stand and walk, did not meet the medical necessity requirements to receive a motorized wheelchair and mostly did not use or need the scooters delivered by defendants.
Thomas, 40, by and through her Houston company called S&L Personal Care, bought fraudulent prescriptions for motorized wheelchairs from various Houston physicians, most of whom have since been convicted of health care fraud. Thomas billed her prescriptions through the other defendants’ DME companies.
During the conspiracy, the Medicare reimbursement rate in Houston, Texas, for a K0011 motorized wheelchair and related accessories was approximately $4,700; with the Medicaid 20 percent copay, the paid amount was close to $6,000. Both a motorized wheelchair and a scooter cost approximately $800 to $1,000 wholesale.
All four defendants face a statutory maximum penalty of 10 years imprisonment and a $250,000 fine for the health care fraud conviction and the conspiracy to commit health care fraud convictions and will be subject to a court supervision following release from prison for a maximum term of three years. Sentencing hearings for each of the four defendants have been set for various dates this spring.
Outcome: As an ethics and white collar crime speaker (www.chuckgallagher.com), I often talk to groups about the Truth about Consequences. In this case, the choices made will have far reaching effects. Likely, each will face an active prison sentence along with substantial restitution. Trying to bilk the government for money that is ill gotten is just down right stupid. I know from personal experience, that the minor gains that one thinks they get from poor choices never compare to the consequences that are suffered as a result of those choices.